Firm-Level Financial Resources and Environmental Spills

68 Pages Posted: 26 Apr 2018 Last revised: 6 Nov 2018

See all articles by Jonathan B. Cohn

Jonathan B. Cohn

University of Texas at Austin

Tatyana Deryugina

University of Illinois

Multiple version iconThere are 2 versions of this paper

Date Written: October 27, 2018

Abstract

Using novel US environmental spill data, we document a robust negative relationship between the number of spills a firm experiences in a given year and its contemporaneous and lagged (but not future) cash flow. In addition, studying two natural experiments, we find an increase (decrease) in spills following negative (positive) shocks to a firm's financial resources, relative to control firms. Overall, our results suggest that firms' financial resources play an important role in their ability to mitigate environmental risk and that such resources therefore affect communities in which these firms operate.

Keywords: financing constraints, environmental spills, non-financial stakeholders

JEL Classification: G32, Q53

Suggested Citation

Cohn, Jonathan B. and Deryugina, Tatyana, Firm-Level Financial Resources and Environmental Spills (October 27, 2018). Available at SSRN: https://ssrn.com/abstract=3158925 or http://dx.doi.org/10.2139/ssrn.3158925

Jonathan B. Cohn (Contact Author)

University of Texas at Austin ( email )

Red McCombs School of Business
Austin, TX 78712
United States
512-232-6827 (Phone)

Tatyana Deryugina

University of Illinois ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

HOME PAGE: http://deryugina.com

Register to save articles to
your library

Register

Paper statistics

Downloads
45
Abstract Views
364
PlumX Metrics